Reviewing the Commercial Real Estate Process: Why You Need a CRE Acquisitions and Dispositions Team

To understand the commercial process in real estate for acquiring and disposing of property, you need to define an acquisition and a disposition. In very basic terms, an acquisition involves buying a commercial property while a disposition entails selling it. Therefore, an acquisition refers to the date an asset is purchased while a disposition relates to the day an asset is sold.

Both investors and owner-operators are privy to the acquisition and disposition of real estate. To ensure that these processes are done right, you need to align yourself with an acquisitions and sales team in the CRE field. Both of these activities involve skills that require a thorough knowledge of both of these protocols.

Acquiring Commercial Properties

Acquiring a commercial real estate property involves four skills – marketing, lead processing, research, and closing. By working with an acquisitions management team, you can benefit in the following ways.

  • Team members employ marketing methods that generate responses from sellers. Acquisition marketing may include direct mailings, text message blasts, or online marketing
  • When they retrieve leads, the acquisition team works tirelessly to respond to the messages.
  • Research is performed to make an intelligent offer. It is also necessary to investigate sellers to ensure nothing can hinder the sale. Information, such as rental details, profit and loss statements, property zoning regulations, and communications with contractors, inspectors, and appraisers are gathered.
  • The closing only happens when the property passes due diligence (or the research is performed) and the parties have agreed on the terms.

Disposing of Commercial Real Estate

Team members  that cover a disposition of a commercial property must also have the same skills – marketing, lead retrieval, research, and an understanding of the closing process. However, in this instance, they use these skills to negotiate sales. 

What Happens During a Disposition?

During a disposition, an advisor in the CRE field determines the property’s position in the marketplace. To calculate a sales price, the disposition may involve the following tasks:

  • Collect current property information from the Internet and corporate sources.
  • Identify possible barriers, such as deed restriction or zoning limitations.
  • Determine the price by comparing properties and reviewing market vacancies.
  • Determine a property’s potential for a higher value alternative use.
  • Contact economic development authorities for possible sale incentives.
  • Develop an action plan that aligns with disposition objectives.

Both acquisitions and dispositions involve property inspections and performing tours to review a property’s potential and weaknesses. They also cover dispositions that relate to a property’s survey, title, physical condition, and environmental influences.

The Nature of the Marketplace

Acquisitions and dispositions involve CRE property transactions that involve the direct purchase or sale of a property. To engage in the transaction, you need to know a great deal about the CRE industry or have access to a firm that can help. 

Because a commercial property is a high-value and high-risk investment, the buyer or seller should be well-capitalized. Ideal properties represent real estate that is low in supply and high in demand, which offer favorable lease rates. The strength of a community’s local economy also impacts the worth of CRE properties.

Professionals that focus on CRE acquisitions and sales can assist realtors, investors, and property owners in their transactions. Doing so helps clients grow their  portfolios or avoid any problems in the  purchase or the sale of high-profile real estate.